Streetwise Professor

July 21, 2019

Zip It, Fritz

Filed under: Economics,History,Military,Politics — cpirrong @ 5:59 pm

File this under “We didn’t bomb them enough.” (Maybe I should create a new category for easy reference.)

Item One: Angela Merkel expressed “solidarity” with Ocasio-Cortez, Omar, Tlaiba, and Pressley. She then proceeded to pontificate on her views of what makes America strong.

Item Two: The CEO of Siemens called Trump “the face of racism and exclusion.

To which I say: mind you own goddam business, Fritz.

Merkel has obviously let all the post-November 2016 bologna about her being the new leader of the free world go to her head. In fact, she is merely the de facto leader of the 4th Reich (who recently succeeded in installing her puppet as de jure leader), and one who has pigheadedly stuck to immigration policies that many Germans strenuously oppose: this no doubt explains her haste to chime in on an issue that is related to America’s immigration debate.

As for Siemens: where to begin? This company’s history is so sordid that its CEO (a successor to a long line of corruptocrats, and an accomplice to mass murder) should not dare to cast aspersions on anyone for anything.

Siemens was deeply enmeshed in the Nazi war economy. Its attempted justification for its conduct makes appalling reading. It attempts to distance itself from its role by claiming it didn’t make things that actually blew up, like bombs and such. It only made electronics. Which of course were vital to a technologically advanced war (e.g., vital components of V1 and V2 rockets, which did in fact blow up, causing thousands of civilian deaths).

It admits to using forced labor, but its description is extremely sanitized, and incomplete. This sentence is rich: “The fact that Siemens allowed people to work against their will during a time when the company was an integral part of the wartime economy of the national socialistic rogue regime is something that the company’s current top management and employees deeply regret.”

Allowed people to work against their will? That sentence is an oxymoron, and a disgusting one at that. And the description of the actual extent of forced labor, and the nature of the forced labor, does not do justice to the malignity of the company’s conduct, and its complicity in the Nazi regime’s atrocities. It talks benignly about moving production facilities due to Allied bombing, but manages to neglect mentioning that it operated these facilities at numerous death camps, including: Auschwitz, Buchenwald, Flossenberg, Gross Rosen, Mauthausen, Neuengamme, Ravensbruck, & Sachsenhausen.

The whole presentation is so dishonest as to make it utterly worthless as an apology, or even an acknowledgement.

That’s in the past, you might say. Well, post-WWII, the company hasn’t utilized forced labor, but has engaged in what is likely the most pervasive pattern of corruption of any large company anywhere in the world. Google “Siemens corruption” and the suggested search terms list a slew of countries: Argentina, Greece, Nigeria, Russia, China. It has paid billions in fines.

Like other German companies, it rushed to do business in Iran (the country that has pledged to finish the job German started), only to state regretfully that the Bad Orange Man made it impossible to continue to do so.

And, of course, Merkel holds Siemens in the highest standing.

Merkel’s and Siemens’ opinions about US politics and US society are gratuitously offered, and worth less. And considering the source, they have no business lecturing others. So zip it, Fritz.

July 11, 2019

Don’t Believe Me: Believe the Hand Up the @AOC Sockpuppet

Filed under: Economics,History,Politics — cpirrong @ 6:26 pm

Back in March, I opined that the Green New Deal was a Trojan Horse for a grandiose plan to remake the economy on socialist/communist lines:

But whenever Bordoff asked a question about energy, or climate policy, Gunn-Wright couldn’t even feign interest. Her responses were in the vein of “whatever”, and then she launched into impassioned monologues about what really interested her–a laundry list of progressive dreams from health care to child care to labor policy.

What’s clear from Gunn-Wright’s performance is that “climate change” is merely a Trojan Horse for a hard-core leftist agenda. The plan is to use climate alarmism to stampede voters into electing hard-left politicians who, once ensconced in power, will implement what good (I use that term ironically) socialists have been drooling to implement for decades–since before the original New Deal.

But don’t take my word for it! Heed the hand up the AOC sockpuppet, Saikat Chakrabarti:

“The interesting thing about the Green New Deal is it wasn’t originally a climate thing at all,” Chakrabarti said, according to the Post. “Do you guys think of it as a climate thing? Because we really think of it as a how-do-you-change-the-entire-economy thing.”

Pretty much what I said.

Chakrabarti, by the way, is known for wearing t-shirts bearing the image of one Subhas Chandra Bose. A charmer, he was. Escaping from India, he traveled to Germany, where he raised a force of Indian POWs to fight for the Nazis, only to be disappointed when his new buddy Hitler invaded his old buddy Stalin’s USSR.

He then took a U-boat (U-180) (you can’t make up this stuff!) to Japan, and then spearheaded the recruiting of the Indian National Army that fought alongside the Japanese in Burma.

As the war ground down, 12 days after Hiroshima, Bose was tragically (well, not really) killed in the crash of a Japanese plane on Formosa.

Such is the role model of AOC’s ventriloquist. In his mind, British colonialism was so bad that it made acceptable and defensible canoodling with three of the four greatest mass murdering regimes of the 20th century (Bose died, alas, before he could have collected the set and conspired with Mao). Just think what he would be willing to do to rid the world of evil capitalist regimes, like the US.

March 4, 2019

The New Green Trojan Horse

Filed under: Climate Change,Economics,Energy,Politics,Regulation — cpirrong @ 7:16 pm

My daughter alerted me to this interview of Rhiana Gunn-Wright, “one of the architects of the Green New Deal.” It’s annoying–I swear I would have gone completely mental had she said “right?” one more time–but educational. Not because you will learn anything about the way the world works, but you will learn the way the minds of the Green New Dealers work.

The interview is hosted by ex-Obamaite Jason Bordoff, now of Columbia University’s Center on Global Energy Policy. Given Bordoff’s current gig, he was obviously interested in the GND’s implications for energy. After all, the supposed raison d’etre of the GND is that our current energy system, dependent on fossil fuels as it is, is causing us to hurtle towards catastrophic warming.

But whenever Bordoff asked a question about energy, or climate policy, Gunn-Wright couldn’t even feign interest. Her responses were in the vein of “whatever”, and then she launched into impassioned monologues about what really interested her–a laundry list of progressive dreams from health care to child care to labor policy.

What’s clear from Gunn-Wright’s performance is that “climate change” is merely a Trojan Horse for a hard-core leftist agenda. The plan is to use climate alarmism to stampede voters into electing hard-left politicians who, once ensconced in power, will implement what good (I use that term ironically) socialists have been drooling to implement for decades–since before the original New Deal.

Meaning that if you think the GND as presented by the likes of AOC and Sen. Ed Malarky–excuse me, Markey–would be ruinously expensive–you ain’t seen nothing yet!

Speaking of AOC, thinking of her reminded me of Mark Twain: “First, suppose you are an idiot; now suppose you are a member of Congress. But I repeat myself.” I think even Twain would be gobsmacked by the stupidity of Ocasio-Cortez. It’s beyond disturbing that such a moron promoting such a malign program is taken seriously, and has indeed bamboozled virtually every Democratic presidential candidate into endorsing her program.

But maybe that’s the good news. I think that it is highly likely that as enthusiastically as the coastal elites have embraced GND, it will prove toxic at the ballot box. Trump’s full-throated attacks on socialism certainly indicate that he believes so. And he has an innate sense for these things, as the very fact that he is president demonstrates.

One last thing. If you think I was scathing about the GND, I had nothing on Richard Epstein. He about jumps out of your computer in this podcast from a few weeks back. Worth a listen–especially as an antidote to the leftist bromides of Rhiana Gunn-Wright. Right?

February 13, 2019

Brave Green World

Filed under: Climate Change,Economics,Politics,Regulation — cpirrong @ 11:21 am

I was considering not commenting on the Green New Deal, given the largely negative–and often incredulous and scathing–response that its release evoked. Including from mainstream Democratic politicians, notably Nancy Pelosi. But most of the cast of thousands currently seeking the Democratic presidential nomination have embraced it to some degree or another, and the criticism has spurred a counterattack from many media precincts. The plan will therefore not be consigned immediately to oblivion, so I will weigh in.

In a nutshell (emphasis on the “nut”), the proposal aims at making the US “carbon neutral” in a mere decade by eliminating the internal combustion engine, retrofitting every existing building in the US, largely eliminating air travel and replacing it with high speed rail, and reducing, er, flatulence from cows by sharply reducing our consumption of meat. No biggie, right?

I find it somewhat ironic that hard on the heels of the announcement of the basics of the GND, the hard left governor of California, Gavin Newsome, said it was necessary to “get real” and recognize that the state’s high speed rail project was a disaster, and to eliminate most of the route.

But “getting real” is not on the GND agenda.

If implemented, the GND would effectively destroy a vast amount of the existing US capital stock, or require its replacement with less productive capital. This will make Americans poorer, in terms of consumption of goods and services.

The proponents of the GND commit the fundamental economic fallacy of arguing that this destruction of productive resources will bolster the economy because of all the jobs that will be created to build a fossil-fuel free power system, electric autos, massive rail systems, etc. The reality (sorry, but I can’t help dealing in reality) is that jobs are a cost, as is the decline in consumption required to make massive investments in new capital to replace existing capital.

The point of producing–including through the use of labor which entails the cost of foregone leisure–is to consume. The GND will unambiguously reduce consumption of goods and services, and make us poorer. GND is crypto-Keynesianism at its worst.

Then there is the detail of paying for this. Here advocates of GND invoke MMT–Magical Monetary Theory. Sorry, MMT actually stands for “Modern Monetary Theory” but my description is far more accurate. MMT is free lunch economics writ large, mistakes accounting identities for economic substance, and commits errors that would be embarrassing for someone in their first session of Econ 101 at one of your more backward community colleges.

The Magical Monetary Theorists argue that an endeavor as massive as the GND can be paid for by printing money.

Really. Don’t believe me? Consider this (rather conclusory) tweet by a major MMT advocate, Stephanie Kelton:

Q: Can we afford a #
? A: Yes. The federal government can afford to buy whatever is for sale in its own currency.

What follows (as is usually the case with MMT arguments) is a verbal discussion of a game of financial Three Card Monte.

Read that again: ” The federal government can afford to buy whatever is for sale in its own currency.” But at what price, dear? At what price? Venezuela has been operating on this principle, and is on pace to achieve record inflation of more than a million percent per year.

All of which obscures the economic essence. Investment today requires people to reduce consumption of goods and services. They only do so in anticipation of consuming more in the future–the “more” is the interest/return on capital from the investment. In private capital markets, the interest rate/return on capital adjusts so that the additional consumption people demand to fund investment is just paid for by the additional production flowing from the assets invested in.

In GND, as noted above, the massive investment will not result in a greater flow of goods and services in the future that will make people willingly reduce their consumption today. Indeed, future consumption in goods and services will decline. The private rate of return will be negative.

And indeed, GND implicitly acknowledges this. Its entire rationale is to reduce carbon emissions, under the theory that these are a “bad.” That is, the payoff from the massive investment (the sacrifice of private consumption) is a lower level of bad carbon emissions.

But to the extent that the reduction of this particular bad is a good, it is a public good. Everyone benefits from a decline in this putative pollutant, regardless of their contribution in paying for the reduction. Meaning that it cannot be financed voluntarily via private capital market transactions, but must be compelled, and paid for through massive taxation.

Printing money only changes the form and/or the timing of the taxation. Inflation is a tax. Moreover, if you borrow/print to pay for investment today, the investment cost not covered by the inflation tax must be paid for by higher taxes in the future. Like the old oil filter commercial: you can pay me now, or you can pay me later. But you must pay.

This is not hard. But reality is not magical.

Furthermore, given that it will be the most massive government program in history, it will entail all of the rent seeking and waste inherent in such programs.

I should also note that it will entail massive redistribution, most notably from rural, exurban, and suburban areas to urban ones as it will dramatically raise the costs of transportation and mobility which are borne disproportionately by those living outside cities. If a few Euro cents/liter fuel tax in France sparked massive protest in non-metropolitan France, just think of what would be in store in the far more sprawling US in response to taxes orders of magnitude larger than those imposed by Manny Macron.

These costs could be justified if the cost of carbon is sufficiently high, in which case the social rate of return could be substantially higher than the private rate of return, and the cost of capital. But even if one believes the most alarmist estimates of the cost of carbon, the adoption of GND by the US would have a modest–and arguably trivial–impact on emissions and temperatures, given the level and growth of emissions elsewhere, especially in China and India. Thus, the social rate of return is almost certainly far below the cost of capital.

The advocates of GND argue that the US needs a grandiose mission. The analogies that they draw are to NASA’s moon landings, or–get this–World War II and the defeat of the Nazis.

But neither Apollo nor even WWII envisioned the radical transformation of society–which is an explicit goal of GND. Apollo was a focused, and by comparison with GND, a relatively moderate expenditure financed in the ordinary course of government business and intended primarily as a campaign in the Cold War, undertaken at a time when the Johnson administration waged another Cold War campaign–Vietnam–with the specific objective of minimizing disruption to US society and the economy. World War II definitely altered every aspect of American life, but these disruptions were also viewed as temporary sacrifices necessary to win the war, to be reversed at its conclusion. Which happened in the event: the US demobilized rapidly, and most wartime expedients (e.g., rationing, the massive employment of women in manufacturing) were scrapped precipitously at its conclusion. As happened in WWI as well: Harding’s 1920 campaign slogan was “return to normalcy” after the extraordinary measures adopted during the war. But GND proposes to be the new normalcy, deliberately destroying the old normalcy.

The original New Deal as implemented was also not intended to be as transformative as its latter day green version (though the more Bolshi elements of the Roosevelt administration did harbor such ambitions).

What are the politics here? This is being pushed by the urban progressive left, epitomized by Alexandria Ocasio-Cortez, D-Brooklyn. (Sorry, Tatyana!) The ubiquitous AOC is the face and voice of the movement, though frankly I doubt it would get the same attention if her face looked like, say, Debbie Wasserman-Schultz, and I wonder whether her Munchkin voice will eventually grate on even her fellow travelers, not to mention the rest of us.

But the main political effect here is to cause deep fissures in the Democratic party. Mainstream elements are in a state of near panic, which they are attempting to conceal, with little success.

And this will redound to the benefit of Donald Trump. Opposition insanity is the greatest gift an incumbent can receive. And methinks this is a gift that will keep on giving, through November 2020.

Powered by WordPress